The Penny Pinch

Cent coins are costing us a pretty penny

I have been on campus for only a month, and yet I already have a drawer full of loose change. I grant that the quarters, dimes, and nickels come in handy for photocopiers or vending machines, but every day I find myself staring down at Abraham Lincoln and asking, “What am I going to do with you?”

The reply is always silence, predictably—but also appropriately, because even the animate among us can’t come up with a good answer. Indeed, it is high time to abolish the penny from our pockets because, sadly, it isn’t worth a red cent.

Literally, it is worth one cent, but thanks to inflation, the days of penny candy are long over. A price of “one cent” in 1946 is today a dime. Nowadays, it is impossible to find anything that costs a penny, other than one’s thoughts. Even most vending machines and other mechanisms reject this obsolete orange orb.

I admit that people do sometimes use pennies. They throw them into fountains; they put them in the “take a penny, leave a penny” dish. But we don’t take the penny seriously as a unit of currency; when someone finds one on the ground, his or her first thought is, “Wow, good luck,” not, “Wow, I just made a profit.”

According to that, though, the penny doesn’t actually hurt anyone. In fact, the only people who should really care about its fate are people who pay taxes. On Apr. 22, The New York Times reported the updated cost of producing a single penny—1.4 cents.

This is lost wealth in more ways than the obvious. Washington estimates that two-thirds of all pennies are no longer in circulation, representing millions of dollars down the drain. Still, the government, in another triumph, is choosing to make $90 million in pennies this year instead of an additional $90 million in bills or other coins.

Furthermore, we are rapidly approaching the point where melting a penny will produce more wealth than the coin itself. Zinc prices are three times higher than they were in 2003, meaning that the metals alone (97.5 percent zinc, 2.5 percent copper) needed to manufacture one penny cost 0.8 cents and rising. Oh yes, there is also the minor trifle that huge demand for these metals encourages the environmentally destructive mining process needed to extract them.

Add one more category of people whom the penny hurts: those who’ve ever stood in line. A study has shown that making change with pennies adds three seconds to every cash transaction. Penny elimination would save us all time and help us avoid that one customer who insists on paying with exact change, earning stares as dirty as his currency.

On the other side of this particular coin, however, is that sole, intangible, conclusive argument against abolition—the poor penny is a beloved American institution; people will fight to keep it that way, regardless of the mounting number of facts to persuade us otherwise.

The greatest obstacle to fixing the penny problem is cultural awareness. My two cents: We have reached a point where common sense necessitates retiring the common cent.